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Journal ArticleDOI

Performance of intellectual capital in Indian healthcare sector

06 Mar 2015-International Journal of Learning and Intellectual Capital (Inderscience Publishers Ltd)-Vol. 12, Iss: 1, pp 47-60
TL;DR: In this paper, an extended and modified version of the Value Added Intellectual Coefficient (VAIC) model has been presented, where relational capital has been added as a new variable.
Abstract: Measurement of intellectual capital efficiency and its impact on the financial performance of companies is a commonly researched domain. A significant section of researchers have used the Value Added Intellectual Coefficient (VAIC™) model – an accounting data-based measurement model, for this purpose. However, the contemporary literature criticises this model for non-inclusion of relational capital and perfect interdependency between intellectual capital components. This study addresses these shortcomings by presenting an extended and modified version of the VAIC™ model. Relational capital has been added as a new variable. This new model has been tested on the healthcare firms of India. A comparative analysis of the two models has also been done. Regression results do not encourage the inclusion of relational capital in VAIC™. During comparative study, the coefficient of determination values suggest that the proposed model may be preferred over VAIC™ for all the three performance variables – return on assets, return on equity and return on sales. These findings have academic as well as practical implications.
Citations
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Journal ArticleDOI
TL;DR: In this paper, an extended and modified value-added (VA) intellectual coefficient (VAIC) model was proposed to explore the relationship between IC and firm performance for Turkish manufacturing firms on a more detailed level.
Abstract: The purpose of this paper is to propose an extended and modified value-added (VA) intellectual coefficient (VAIC) model, which includes intellectual capital (IC) components which were missing in the original VAIC approach. The proposed model has been used to explore the relationship between IC and firm performance for Turkish manufacturing firms on a more detailed level.,Multiple regression analysis has been employed to identify the IC components, which predict the performance of the firm and the moderating effect of some IC components on IC components–firm performance relationship. Data are required to calculate the IC components, and firm performance variables have been obtained from the financial reports of the Turkish manufacturing firms for the period 2003–2013.,According to the results for Turkish manufacturing sector innovation capital efficiency has a moderating effect on the relationship between structural capital efficiency (SCE) and profitability, meaning, depending on an increase in R&D expenses, the effect of SCE on profitability also increases. On the other hand, it has been found that innovation capital efficiency has a direct impact on firms’ productivity. The results also showed that IC efficiency components have a moderating role on the relationship between capital employed efficiency and profitability.,There might be a time lag until the effect of R&D investments can be observed in firms’ performance. However, this lagged impact of innovation capital and also other IC components on future firm performance has not been investigated due to concerns related to sample size.,The proposed model differs from the original VAIC model in three ways: it, namely, includes two additional IC components, customer capital (CC) and innovation capital. It explores the moderating effect of innovation capital on structural capital–firm performance relationship and the moderating effect of IC components on employed capital–firm performance relationship. As the last difference, it proposes an alteration in the VA calculation due to newly added IC components, CC and innovation capital.

138 citations

Journal ArticleDOI
TL;DR: A data-driven model is proposed that presents new approach to IC assessment, extendable to other economic sectors beyond healthcare, and challenges the views of knowledge sharing deeply held inside organizations by creating “new value” developed through a more collaborative and permeated approach.
Abstract: The aim of this paper is to analyze and measure the effects of intellectual capital (IC), i.e. human capital (HC), relational capital (RC) and structural capital (SC), on healthcare industry organizational performance and understanding the role of data analytics and big data (BD) in healthcare value creation (Wang et al., 2018). Through the assessment of determined variables specific for each component of IC, the paper identifies the guidelines and suggests propositions for a more efficient response in terms of services provided to citizens and, specifically, patients, as well as predicting effective strategies to improve the care management efficiency in terms of cost reduction.,The study has a twofold approach: in the first part, the authors operated a systematic review of the academic literature aiming to enquire the relationship between IC, big data analytics (BDA) and healthcare system, which were also the descriptors employed. In the second part, the authors built an econometric model analyzed through panel data analysis, studying the relationship between IC, namely human, relational and structural capital indicators, and the performance of healthcare system in terms of performance. The study has been conducted on a sample of 28 European countries, notwithstanding the belonging to specific international or supranational bodies, between 2011 and 2016.,The paper proposes a data-driven model that presents new approach to IC assessment, extendable to other economic sectors beyond healthcare. It shows the existence of a positive impact (turning into a mathematical inverse relationship) of the human, relational and structural capital on the performance indicator, while the physical assets (i.e. the available beds in hospitals on total population) positively mediates the relationship, turning into a negative impact of non-IC related inputs on healthcare performance. The result is relevant in terms of managerial implications, enhancing the opportunity to highlight the crucial role of IC in the healthcare sector.,The relationship between IC indicators and performance could be employed in other sectors, disseminating new approaches in academic research. Through the establishment of a relationship between IC factors and performance, the authors implemented an approach in which healthcare organizations are active participants in their economic and social value creation. This challenges the views of knowledge sharing deeply held inside organizations by creating “new value” developed through a more collaborative and permeated approach in terms of knowledge spillovers. A limitation is given by a fragmented policymaking process which carries out different results in each country.,The analysis provides interesting implications on multiple perspectives. The novelty of the study provides interesting implications for managers, practitioners and governmental bodies. A more efficient healthcare system could provide better results in terms of cost minimization and reduction of hospitalization period. Moreover, dissemination of new scientific knowledge and drivers of specialization enhances best practices sharing in the healthcare sector. On the other hand, an improvement in preventive medicine practices could help in reducing the overload of demand for curative treatments, on the perspective of sharply decreasing the avoidable deaths rate and improving societal standards.,The authors provide a new holistic framework on the relationship between IC, BDA and organizational performance in healthcare organizations through a systematic review approach and an empirical panel analysis at a multinational level, which is quite a novelty regarding the healthcare. There is little research focussed on healthcare industries' organizational performance, and, specifically, most of the research on IC in healthcare delivered results in terms of theoretical contribution and qualitative analyzes. The authors even contributed to analyze the healthcare industry in the light of the possible existence of synergies and networks among countries.

22 citations

Journal ArticleDOI
TL;DR: In this paper, the authors explored the relationship between intellectual capital and profitability of healthcare firms in India and found that the intellectual capital is an important driver of corporate performance, and that corporates and governments in developing economies should stimulate investments in developing intellectual capital for enhanced corporate performance and economic growth.
Abstract: PurposeThis study seeks to understand the nexus between intellectual capital and profitability of healthcare firms in India with interaction effects.Design/methodology/approachRelevant data were extracted from the Centre for Monitoring Indian Economy (CMIE)'s Prowess database for a period of ten years 2009–2018 for a sample of 84 selected firms from the healthcare industry. This study uses value added intellectual coefficient (VAIC) and modified value added intellectual coefficient (MVAIC) as a measure of intellectual capital. Further, the study employs panel regression techniques to explore the relationship between intellectual capital and profitability.FindingsThe empirical findings reveal that the intellectual capital coefficient of healthcare firms in India averages 2.7757. It is also observed that a majority of the healthcare firms' intellectual capital coefficient is below the industry average. From the regression analysis, it is evident that the intellectual capital coefficient is positively related to the profitability of healthcare firms in India. As far as the components of intellectual capital coefficient are concerned, the capital employed coefficient (CEC) is the only component driving the profitability of healthcare firms in India. A further introduction of interaction terms improves model explainability and moderates the impact of the predictor variable on the response variable. Furthermore, it is observed that the intellectual capital coefficient of the healthcare industry is immune to changes in political regimes in India.Practical implicationsThe findings reveal that intellectual capital is an important driver of corporate performance, thus healthcare firms in developing economies like India need to enhance their intellectual potential. Therefore, corporates and governments in developing economies should stimulate investments in developing intellectual capital for enhanced corporate performance and economic growth. Thus, this study might be used as a reference by policymakers while drafting the future policy for the development of intellectual capital in general and healthcare sector specifically.Originality/valueThis is among the first few studies to explore such an empirical relationship for healthcare firms in India and among the few studies of this kind across the globe. It also makes novel contributions in considering interaction variables and seeking the consistency of results across different political regimes. However, the study examines one nation and one industry; thus, the generalisation of findings requires caution.

18 citations

Journal ArticleDOI
TL;DR: In this article, the authors examined the influence of intellectual capital performance measured with modified value added intellectual coefficient (MVAIC) to four traditional financial performances: return on assets, return on equity, market to book value and price earnings ratio.
Abstract: The purpose of this study is to examine the influences of intellectual capital performance - measured with modified value added intellectual coefficient (MVAIC) - to four traditional financial performances: return on assets, return on equity, market to book value and price earnings ratio. The data were drawn from 50 biggest market capitalisation companies listed in the Indonesia stock exchange for 8 years (2007-2014). It is an empirical study using WarpPLS 3.0 for the data analysis. The finding shows that: MVAIC influences positively to current and future financial performance. It means that MVAIC can be used to predict the future of financial performance. The results extend the understanding of the role of intellectual capital in creating corporate value and building sustainable advantages for companies in emerging economies.

17 citations


Cites result from "Performance of intellectual capital..."

  • ...Similar findings were also indicated in Mosavi et al. (2012), Yalama and Coskun (2007), Ousama and Fatima (2015) and Vishnu and Gupta (2015)....

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Journal ArticleDOI
TL;DR: In this article, a case study aimed at implementing the International Integrated Reporting Framework (IIRF) in an Italian non-profit healthcare organization is presented, where an adjusted version of IIRF is suggested, highlighting the role played by IC in the organizational business model and in the value creation process.
Abstract: The aim of our research is to give empirical and theoretical solutions to some criticalities of the original International Integrated Reporting Framework (IIRF). Indeed, it takes as value creation only the increase of the capitals triggered by business activities, overlooking the fulfilment of the institutional mission that is the actual value creation lever.,The present paper introduces a case study aimed at implementing the IIRF in an Italian non-profit healthcare organisation. The research is based on theory building from cases, action research and interventionist approach. IIRF was adopted because of its claimed ability to support the communication process to stakeholders and the control of value creation. However, IIRF shows several weaknesses.,An adjusted version of IIRF is suggested, highlighting the role played by IC in the organisational business model and in the value creation process. The adjusted seems able to foster awareness of the role IC in value creation in healthcare organisations.,In this paper no one of the singles pieces of the adjusted framework is innovative by itself, but jointly they give raise to an innovative solution, able to address the disclosing and managerial needs of the examined organisation. The single case study permits to us to test the weaknesses of the IIRF claimed in the literature, to suggest some adjustments to the original framework and to validate their effectiveness. Thanks to the single case study we then built theoretical constructs developing theory inductively; now the suggested framework can be further tested and validated in other organisations.,The paper introduces an innovative approach to IC reporting and disclosure in healthcare organisations. This is relevant not only for external communication but also for internal aims supporting managers in decision and actions.

12 citations

References
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Journal ArticleDOI
TL;DR: In this paper, the authors investigated empirically the relation between the value creation efficiency and firms' market valuation and financial performance, and found that firms' intellectual capital has a positive impact on market value and financial performances, and may be an indicator for future financial performance.
Abstract: Purpose – The purpose of this article is to investigate empirically the relation between the value creation efficiency and firms’ market valuation and financial performance.Design/methodology/approach – Using data drawn from Taiwanese listed companies and Pulic's Value Added Intellectual Coefficient (VAIC™) as the efficiency measure of capital employed and intellectual capital, the authors construct regression models to examine the relationship between corporate value creation efficiency and firms’ market‐to‐book value ratios, and explore the relation between intellectual capital and firms’ current as well as future financial performance.Findings – The results support the hypothesis that firms’ intellectual capital has a positive impact on market value and financial performance, and may be an indicator for future financial performance. In addition, the authors found investors may place different value on the three components of value creation efficiency (physical capital, human capital, and structural cap...

1,185 citations

Journal ArticleDOI
TL;DR: The authors examined the relationships among international diversity, product diversity, and firm performance for large American industrial multinational enterprises (MNEs) and found that product diversity was correlated with international diversity.
Abstract: This study examined the relationships among international diversity, product diversity, and firm performance. For a sample of large American industrial multinational enterprises (MNEs), it showed a...

1,037 citations

01 Jan 2016
Abstract: This study examined the relationships among international diversity, product diversity, and firm performance. For a sample of large American industrial multinational enterprises (MNEs), it showed a consistent quadratic relationship between product diversification and MNE performance but minimal performance differences across different measures of international diversity. Analysis of the interactions of international diversity and product diversity indicates a weak effect from increasing internationalization on the performance effect of product diversity.

1,036 citations

Journal ArticleDOI
TL;DR: In this paper, the authors investigate the association between the efficiency of value added (VA) by the major components of a firm's resource base (physical capital, human capital and structural capital) and three traditional dimensions of corporate performance: profitability, productivity, and market valuation.
Abstract: The principal purpose of this study is to investigate the association between the efficiency of value added (VA) by the major components of a firm's resource base (physical capital, human capital and structural capital) and three traditional dimensions of corporate performance: profitability, productivity, and market valuation. Data are drawn from a sample of 75 publicly traded firms from South Africa from business sectors heavily reliant on intellectual capital. Empirical analysis is conducted using correlation and linear multiple regression analysis. Findings from the empirical analysis indicate that associations between the efficiency of VA by a firm's major resource bases and profitability, productivity and market valuation are generally limited and mixed. Overall, the empirical findings suggest that physical capital remains the most significant underlying resource of corporate performance in South Africa despite efforts to increase the nation's intellectual capital base.

998 citations

Book
01 Jan 1994
TL;DR: The concepts of statistics are presented in the setting of business decision making through the use of many real world examples, real business data and applications.
Abstract: The text is not written for those students who will become statisticians; it is written for future decision makers in business. The focus and goal is to make students better quantitative decision makers. The concepts of statistics are presented in the setting of business decision making through the use of many real world examples, real business data and applications. Student Study Guide: Designed to be used alongside the text book, this invaluable step-by-step study guide walks students through the text as they read it and work problems while supporting the decision making approach.

616 citations